Question

Think about the last time you (or someone in your family) was unemployed. What type of unemployment was it?  

Skills

• Explain how the unemployment rates are defined, computed, and analyzed.
• Describe the various patterns of unemployment.
• Analyze the causes of change in unemployment over the short run

Answer 1

Introduction:-

One of the major problems of todays societies is unemployment which poses as a major threat to capital creation and ensuring that people live their lives in a proper manner respectively. Unemployment in any economy is characterized by conditions in which people who desire to engage in jobs do not get employment opportunities. This could happen because of lack of skills or bad market conditions respectively

The resultant of unemployment is that full employment cannot be achieved in any economy and the overall demand for goods and services in the country remains sluggish respectively.

The last major unemployment which happened in the United States was during the housing crisis in 2008 which led to many people in my family and in the economy as a whole losing their jobs. The situation also had a great global impact in which people beyond the country also lost their jobs since countries had already begun interconnected trade respectively.

Case Specifics:-

Explain how the unemployment rates are defined, computed, and analyzed.

The unemployment is measured as a rate, in terms of the share of the total labor force which is jobless and is expressed as a percentage. Unemployment rates are directly connected to the welfare of any economy. An economy which is fast progressing, sees lower unemployment rates and higher availability of jobs and vice versa.

In the United States, the Unemployment rates are defined by the Bureau of Labor Statistics and these are released on a monthly basis which can then be analyzed and compared over previous months, quarters or years to draw conclusions from.

The rate is measured as follows:-

Unemployed/Labor Force * 100= Unemployment %

Here, Labor force include both employed and unemployed people within a country respectively. To analyze this over a period of time, the statistics can be used from the monthly reports which are published and inferences can be drawn from the same respectively.

Describe the Various Patterns of Unemployment:-

The various patterns and types of unemployment are as described:-

Demand Deficit Unemployment:-

Demand deficit unemployment takes place, when the aggregate demand for products and services declines in a market. The resultant is that producers need to cut down on production and to maintain a decent amount of profit employees end up losing their jobs and results in overall unemployment in the

Structural Unemployment:-

Structural Unemployment arises because of changes in an industry type. The biggest example of this is the production industries in the United States which are seeing intense competition from Chinese and Indian companies which produce at half the costs while maintaining quality at similar levels. The effects of globalization are one of the key contributors towards structural unemployment respectively.

Regional Unemployment:-

Regional unemployment takes place when one or more regions within an economy suffer more because the availability of jobs in that particular market segment is significantly stagnant. This could be because of numerous reasons such as lack of market demand, infrastructure issues etc. For example in Asian Countries employment is restricted to developed areas only while other areas suffer from regional unemployment patterns.

Seasonal Unemployment:-

This pattern of unemployment takes place, when seasons do not favor unemployment in a sector. For example in the agriculture industry some people find it tough to find jobs in the winter when production is relatively lower. In other industries also this may happen as a result of reduced production demand by producers respectively.

Frictional Unemployment:-

Frictional Unemployment is a common happening across the globe, in which people leave their jobs to find better opportunities for themselves. This is also known in some areas as search unemployment. The ways to eradicate this involve increasing the information available so that search time can be reduced respectively.

Question 3) Analyze the causes of change in unemployment over the short run

In the short run, the major reason for a change in unemployment and unemployment rates, are the cyclical fluctuations of demand and supply.

A sudden increase in demand for goods and services in the economy, results in producers wanting more people in their factories so that production and profits can be increased. This results in reduction in the overall unemployment rates in the country. A sudden decrease has the exact opposite effect in the short run.

Please feel free to ask your doubts in the comments section if any.